Agricultural leaders and lobby groups have finally agreed wording to correct a tax advantage for U.S. farmers, introduced in December as part of President Trump's flagship tax reform. Focus now shifts to Congress and an effort to add the wording to the 2018
omnibus appropriations bill, which needs to be passed later this month if the government is to avoid a further shut down.

A joint statement from the National Council of Farmer Cooperatives and the National Grain and Feed Association, the groups that have spearheaded the response, confirmed that the legislative language had been agreed and would be backdated to January 1,
2018.

The resolution addresses the repeal of a provision in the old tax code that guaranteed tax breaks for farmers called Section 199.

With the Tax Cuts and Jobs Act, the original wording of Section 199 was replaced with an updated version that gave tax breaks to farmers trading with farmer cooperatives -- potentially, and unwittingly, cutting major industry players like Cargill, ADM, Louis
Dreyfus and Bunge out of the domestic supply chain.

The wording agrees two key aims, firstly of replicating and protecting the tax arrangements of the original 199 clause for farmers and cooperatives.

Meanwhile, it also restores the competitive domestic landscape "so that the tax code does not provide an incentive for farmers to do business with a company purely because it is organized as a cooperative or private/independent firm," the joint statement said.